SAN FRANCISCO, June 16 (Xinhua) -- U.S. Northern California-based gym chain 24 Hour Fitness announced on Tuesday that it has received court approval of 250 million U.S. dollars in financing one day after its filing for relief in the U.S. Bankruptcy Court due to the impact of the COVID-19 pandemic.
The company said in a statement on Tuesday that it has received approval from the U.S. Bankruptcy Court for the District of Delaware for the First Day motions related to its voluntary Chapter 11 filing on June 15. The approved motions will support the company's continued business operations while it implements the financial restructuring process.
The court's approval includes granting the company access to approximately 250 million U.S. dollars in debtor-in-possession (DIP) financing provided by existing lenders, which, combined with the company's cash from operations, will provide sufficient liquidity to allow operations to continue, including club reopenings, while the Chapter 11 process is completed, according to the statement.
The court also approved the company to continue paying employee wages, providing healthcare and other benefits, and to pay vendor partners for all goods or services provided on or after June 15, 2020.
"We are pleased to receive the court's approval of these first day motions, as this marks the first day of our journey forward as a stronger, more resilient company. We will be able to continue our club reopening process as planned in order to serve our club members and the 24 Hour Fitness community," said the company's CEO Tony Ueber.
"We are using this Chapter 11 process as a tool to reduce debt and pave the way towards a successful future," he added.
The company said that it is continuing to reopen clubs nationwide in a phased approach following state and local government and public health agency guidelines and expects the majority of its club footprint to be reopened by the end of June.
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